NOV has authorized 1 billion shares of $0.01 par value common stock. The Company also has authorized 10 million shares of $0.01 par value preferred stock, none of which is issued or outstanding.

Cash dividends aggregated $19 million and $77 million for the years ended December 31, 2020 and 2019, respectively. The declaration and payment of future dividends is at the discretion of the Company’s Board of Directors and will be dependent upon the Company’s results of operations, financial condition, capital requirements and other factors deemed relevant by the Company’s Board of Directors.

Total compensation cost that has been charged against income for all share-based compensation arrangements was $105 million, $130 million and $110 million for 2020, 2019 and 2018, respectively. The total income tax benefit recognized before consideration of valuation allowance in the consolidated statements of income for all share-based compensation arrangements was $3 million, $14 million and $16 million for 2020, 2019 and 2018, respectively.

The Company’s stock-based compensation plan, known as the National Oilwell Varco, Inc. 2018 Long-Term Incentive Plan (the “2018 Plan”), was approved by shareholders on May 11, 2018. The 2018 Plan provides for the granting of stock options, restricted stock, restricted stock units, performance awards, phantom shares, stock appreciation rights, stock payments and substitute awards. The number of shares authorized under the 2018 Plan is 42.7 million. The 2018 Plan is also subject to a fungible ratio concept, such that the issuance of stock options and stock appreciation rights reduces the number of available shares under the 2018 Plan on a 1-for-1 basis, and the issuance of other awards reduces the number of available shares under the 2018 Plan on a 2.5-for-1 basis. At December 31, 2020, approximately 24.0 million shares were available for future grants.

The Company also has outstanding awards under its other stock-based compensation plan known as the National Oilwell Varco, Inc. Long-Term Incentive Plan (the “Plan”), however the Company is no longer granting new awards under the Plan. The Plan provides for the granting of stock options, performance-based share awards, restricted stock, phantom shares, stock payments and stock appreciation rights (“SARs”). The number of shares authorized under the Plan is 69.4 million. The Plan is subject to a fungible ratio concept, such that the issuance of stock options and SARs reduces the number of available shares under the Plan on a 1-for-1 basis, and the issuance of other awards reduces the number of available shares under the Plan on a 3-for-1 basis.

Options granted under our stock-based compensation plans generally vest over a three-year period starting one year from the date of grant and expire ten years from the date of grant. The purchase price of options granted may not be less than the closing market price of NOV common stock on the date of grant.

Stock option information summarized below includes amounts for the National Oilwell Varco Long-Term Incentive Plans and stock plans of acquired companies. Options outstanding at December 31, 2020 under the stock option plans have exercise prices between $20.23 and $77.99 per share, and expire at various dates from February 23, 2021 to February 26, 2030.

	Years Ended December 31,
	2020					2019					2018
	Number			Average		Number			Average		Number			Average
	of			Exercise		of			Exercise		of			Exercise
	Shares			Price		Shares			Price		Shares			Price
Shares under option at beginning of year		21,310,099		$	47.68		21,009,508		$	48.88		22,472,047		$	48.99
Granted		1,650,262			20.23		1,493,576			28.72		1,610,599			35.09
Forfeited		(1,954,859	)		45.75		(944,917	)		50.57		(1,318,380	)		57.56
Exercised		—			—		(248,068	)		29.70		(1,754,758	)		44.12
Shares under option at end of year		21,005,502		$	45.70		21,310,099		$	47.68		21,009,508		$	48.88
Exercisable at end of year		17,893,434		$	49.25		17,796,607		$	50.49		15,223,029		$	54.13

The following summarizes information about stock options outstanding at December 31, 2020:

	Weighted-Avg		Options Outstanding				Options Exercisable
	Remaining				Weighted-Avg				Weighted-Avg
Range of Exercise Price	Contractual Life		Shares		Exercise Price		Shares		Exercise Price
$20.23 - $55.00		5.85		15,816,183	$	37.65		12,704,115	$	40.68
$55.01 - $70.00		2.68		3,252,338		66.82		3,252,338		66.82
$70.01 - $77.99		0.70		1,936,981		75.96		1,936,981		75.96
Total		4.89		21,005,502	$	45.70		17,893,434	$	49.25

The weighted-average fair value of options granted during 2020, 2019 and 2018, was approximately $5.83, $9.06 and $10.01 per share, respectively, as determined using the Black-Scholes option-pricing model. The total intrinsic value of options exercised during 2020 and 2019 was zero and $6 million, respectively.

The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise activity. The use of the Black Scholes model requires the use of actual employee exercise activity data and the use of a number of complex assumptions including expected volatility, risk-free interest rate, expected dividends and expected term.

	Years Ended December 31,
Valuation Assumptions:	2020			2019			2018
Expected volatility		35.0	%		35.9	%		31.8	%
Risk-free interest rate		1.2	%		2.5	%		2.7	%
Expected dividend yield		1.0	%		0.7	%		0.6	%
Expected term (in years)		4.8			4.5			4.3

The Company used the actual volatility for traded options for the past 10 years prior to option date as the expected volatility assumption required in the Black Scholes model.

The risk-free interest rate assumption is based upon observed interest rates appropriate for the term of our employee stock options. The dividend yield assumption is based on the history and expectation of dividend payouts. The estimated expected term is based on actual employee exercise activity for the past ten years. Forfeitures are accounted for as they occur.

The following summary presents information regarding outstanding options at December 31, 2020 and changes during 2020 with regard to options under all stock option plans:

				Weighted- Average		Weighted Average Remaining Contractual		Aggregate
	Shares			Exercise Price		Term (years)		Intrinsic Value
Outstanding at December 31, 2019		21,310,099		$	47.68		5.36	$	—
Granted		1,650,262		$	20.23
Forfeited		(1,954,859	)	$	45.75
Exercised		—		$	—
Outstanding at December 31, 2020		21,005,502		$	45.70		4.89	$	—
Exercisable at December 31, 2020		17,893,434		$	49.25		4.28	$	—

At December 31, 2020, total unrecognized compensation cost related to nonvested stock options was $12 million. This cost is expected to be recognized over a weighted-average period of three years. The total fair value of stock options vested in 2020, 2019 and 2018 was approximately $18 million, $32 million and $26 million, respectively. Cash received from option exercises for 2020, 2019 and 2018 was zero, $7 million and $54 million, respectively. The actual tax benefit (expense) realized for the tax deductions from option exercises totaled zero, $(2) million, and $2 million for 2020, 2019 and 2018, respectively.

On December 20, 2017, the Company made a tender offer to exchange SARs issued to certain employees on February 24, 2016 (“2016 SARs”) for cash, amended SARs, and new stock options. The transaction was structured to provide the employees an equal long-term incentive compensation value, while alleviating volatility in the Company’s earnings caused by required mark-to-market accounting on outstanding SARS. Of the outstanding 2016 SARs, 94.75% were exchanged resulting in a total cash payment of $14 million and granting of 3,613,707 new stock options on the exchange date with an exercise price of $34.32 and a fair value of $8.47, with vesting matched to the exchanged 2016 SARs.

	Year Ended December 31,
	2020					2019
	Number			Average		Number			Average
	of			Exercise		of			Exercise
	Shares			Price		Shares			Price
Shares under SARs at beginning of year		1,330,257		$	28.45		1,399,302		$	28.49
Granted		7,912			20.23		7,088			28.72
Forfeited		(103,604	)		28.38		(76,133	)		29.18
Exercised		—			—		—			—
Shares under SARs at end of year		1,234,565		$	28.40		1,330,257		$	28.45
Exercisable at end of year		1,219,555		$	28.44		1,315,701		$	28.40

The Company recognized no expense in 2020, 2019, or 2018. There was no liability for cash-settled SARs at December 31, 2020.

The Company issues restricted stock awards and restricted stock units to officers and key employees in addition to stock options. On February 25, 2020, the Company granted 2,535,174 shares of restricted stock and restricted stock units with a fair value of $20.23 per share; and performance share awards to senior management employees with potential payouts varying from zero to 1,063,274 shares. The restricted stock and restricted stock units vest in three equal annual installments commencing on the first anniversary of the date of grant. The performance share awards can be earned based on performance against established goals over a three-year performance period. The 2018 performance share awards are based entirely on a TSR (total shareholder return) goal. Performance against the TSR goal is determined by comparing the performance of the Company’s TSR with the TSR performance of the members of the OSX (Oil Service Sector) index for the three-year performance period. The 2019 and 2020 performance share awards are divided into two independent parts that are subject to two separate performance metrics: 85% with a TSR (total shareholder return) goal and 15% with an internal NVA (“National Oilwell Varco Value Added”) (return on capital metric) goal. Performance against the TSR goal is determined by comparing the performance of the Company’s TSR with the TSR performance of the members of the OSX index for the three-year performance period. The NVA goal is based on the Company’s improvement in NVA from the beginning of the performance period until the end of the performance period. NVA shall be calculated as an amount equal to the Company’s (a) gross cash earnings less (b) average gross operating assets times an amount equal to a required return on assets.

On May 20, 2020, the Company granted 99,696 restricted stock awards with a fair value of $13.00 per share. The awards were granted to non-employee members of the board of directors and vest on the first anniversary of the grant date.

The following summary presents information regarding outstanding restricted shares:

	Years Ended December 31,
	2020					2019					2018
				Weighted-					Weighted-					Weighted-
	Number			Average		Number			Average		Number			Average
	of			Grant Date		of			Grant Date		of			Grant Date
	Units			Fair Value		Units			Fair Value		Units			Fair Value
Nonvested at beginning of year		6,274,308		$	33.10		5,914,860		$	34.41		4,889,678		$	37.04
Granted		3,166,402		$	19.98		3,335,315		$	28.52		2,657,115		$	35.17
Vested		(3,229,624	)	$	20.09		(2,901,945	)	$	25.67		(1,242,682	)	$	34.86
Forfeited		(137,123	)	$	45.75		(73,922	)	$	50.57		(389,251	)	$	57.56
Nonvested at end of year		6,073,963		$	31.85		6,274,308		$	33.10		5,914,860		$	34.41

At December 31, 2020, there was approximately $80 million of unrecognized compensation cost related to nonvested restricted stock awards and restricted stock units, which is expected to be recognized over a weighted-average period of two years.